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No sell-outs here…

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Beleaguered retailer Abercrombie & Fitch decided that it is not going to sell itself off after all. That bit of news sent shares of the company plummeting as much as 20% today because apparently Wall Street doesn’t think the company has what it takes to pull itself out of its fiscal mess all by itself. Judging by Abercrombie & Fitch’s last several quarters of declining sales – going back to 2014, in fact – Wall Street might be onto something. A&F’s efforts to ditch its logo and start fresh with a whole new campaign for the brand earlier this year didn’t do much to move sales. Then of course, A&F had to contend with competition from fast-fashion rivals like Zara and H&M, which seemed to make matters precipitously worse, and not just for A&F. But it’s not as if A&F didn’t have a few good suitors that were gearing up to help it turn its fiscal tide. Word on the Street was that American Eagle Outfitters, together with private equity firm Cerberus Capital, was in talks with the retailer to acquire it. Unfortunately, for A&F anyway, the two sides couldn’t seem to agree on the terms of a sale and the deal is officially on ice.

Cough it up…

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Just when you thought Wells Fargo was done paying through its corporate nose for its actions that led to its mammoth fraudulent account scandal, along comes another class action settlement. This time to the tune of $142 million, an amount that a federal judge deemed “fair, reasonable and adequate.” But I guess that depends on whom you ask. In any case, the recipients of this latest settlement include customers who had fake accounts opened in their names and whose credit scores may have become negatively affected as a result of the fake account openings. While the actual payment per customer has yet to be established, rumor has it that the payments will be based on how much a customer’s credit score dropped, among other factors. Unfortunately, it probably wont be until after 2018 that customers can expect to see any sort of compensation. This latest settlement is in addition to the $185 million fine levied by state and federal regulators last year and the $3.26 million that the bank had to pay back to customers for fees wrongly accrued from those fraudulent accounts.Wells Fargo, believe it or not, is still undergoing investigations from several states, and that’s even with ten more class action suits in the wings.

Break for it…

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In case you were hoping for a tax increase on the wealthy, then forgive me for dashing those hopes. According to Treasury Secretary Steven Mnuchin, while discussing the tax overhaul proposal – which the White House is very committed to getting passed by the end of the year, fyi – that increase was never on the table. And if you happen to be in that wealthy tax bracket, well then, lucky you on so many levels. It seems there was this “sort of” rumor that a 40% tax increase would be levied on the wealthy that would allow for some nifty tax breaks for the middle class. But alas, it’s not happening. Well, the tax breaks are expected to happen for the middle class, but without imposing a higher rate on those fortunate enough to find themselves in a higher bracket. Mnuchin also assures us that there are no increases in store for the middle class either. Which seems like the decent thing to do.

So trendy…

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H&M posted some particularly impressive digits with profits up 36% to about $423 million. Of course, since it’s a Swedish company, those numbers came out to 3.61 billion kronors. I’m guessing analysts don’t do a lot of shopping at the world’s second largest retailer because they only expected 3.32 billion kronors. H&M attributes a lot of that success to some major online and store expansion activity. Whatever it was, it worked. But here’s where things got dicey. Shares of the company fell over 3% because of one not so teeny tiny problem: Revenue for the first three weeks of March slowed to 9% from February’s 15%. This put a damper on the profit surge news. However, one analyst graciously pointed out that it was the first time in 17 months that growth even slowed to under 10%. So no one’s too concerned. It wouldn’t be right not to blame some of that on a winter that has overstayed its welcome. However, that strong dollar of ours is also going to be messing with H&M too, as it’s going to get a lot pricier to purchase goods and services to put out all those fabulously trendy and cheap clothes. Then there’s the not so minor issue that so much of its merchandise is purchased in dollars even though its sold in Euros. That might put a fiscal crimp on things, as well. Strong dollar or weak euro, H&M still has plans to open 400 stores worldwide.

Googled it…

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Ruth Porat. Remember that name. That is, if you didn’t already, as she is regarded as one of the “most powerful women on Wall Street.” Except she’s ditching Wall Street for a new gig in Silicon Valley as Google’s new CFO. Just how big a deal is it? Well, Wall Street liked the appointment so much that Google’s stock went up almost 3% today because of it. Yeah, she’s that impressive. Ms. Porat has been at Morgan Stanley for 28 years but is no stranger to tech having worked on some major deals for both Amazon and eBay. During 2008’s nasty fiscal crisis, she advised the U.S. Department of Treasury on AIG, Freddie Mac and Fannie Mae. She was even under consideration for the role of Deputy Treasury Secretary. Not too shabby. She’ll be replacing Patrick Pichette who said he’s retiring to spend more time with his family. So friggin’ sweet. Ms. Porat gets to report to Google co-founder and CEO, Larry Page, who is presumably just as stoked about his new hire as Wall Street is.

Would you like that to go?

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Is it a taco? Or is it a biscuit. Excellent question and for Taco Bell, whatever you decide probably won’t matter as long as you buy the darn thing. The fast-food chain is heating up the breakfast wars, yet again, armed with its latest weaponry – the taco biscuit, a biscuit in the shape of a taco. Got that? Last year Taco Bell took an advertising swing at McDonald’s with a campaign featuring people whose names were actually Ronald McDonald, devouring a Taco Bell breakfast and loving it. While it’s no doubt that McDonald’s did not care for this little shtick, the fact is that breakfast at the Golden Arches still accounts for 25% of McDonald’s sales when Taco Bell only sees 6% of its sales going towards the most important meal of the day (so they say). Since traffic has been going up at fast-food establishments for the last four years, does the Taco Biscuit have what it takes to propel Taco Bell and its 6,000 U.S. establishments to hit its goal of seeing 20% of sales coming from breakfast? Time will tell, o’ fearless breakfast diner.

Teen-y tiny…

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Teen-centric apparel company Abercrombie & Fitch took a fourth quarter beating. One of the (many) reasons seems to be that the fickle adolescent community got tired of advertising the A&F logo on their chests and butts. And like so many other companies, the strong U.S. dollar also seemed to be putting a crimp in the retailer’s numbers, especially considering that a third of the company’s revenue comes from outside the country. Same store sales also decreased by 10%. Then there’s the part about how teens have been spending less money on clothing than in recent years, yet they are increasingly looking to outfit themselves through the likes of H&M, Forever 21 and Zara. Those chains tend to offer “fast fashion” that kids today totally dig at much better prices. Does that make A&F’s fashions slow? Hmmm. Oddly enough, American Eagle, one of A&F’s competitors actually beat the street with its earnings and even hit a 52-week high. Net sales of Abercrombie & Fitch fell 14% to $1.12 billion with profits coming in at $44.4 million and 63 cents per share. Analysts expected $1.15 per share on $1.17 billion in revenue. To add insult to injury, Abercrombie & Fitch is looking to unload its company jet , a relic from the days when big mouth CEO Michael Jeffries ruled the A&F empire.

Cured!

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If you’re not into chicken seasoned with antibiotics, then you’re in luck. McDonalds has decided to scrap that special feature from its poultry menu, except it’s going to take approximately two years to fully get there. Steve Easterbrook, who took over as CEO just three days ago, did promise some major changes at the the Golden Arches. The fast-food company has become increasingly concerned over “superbugs” that have caused about 23,000 deaths per year. McDonalds will still allow ionophores in its chicken products. Yum. But don’t sweat it too much. Ionophores are antibiotics meant for our feathered friends – not for humans. Phew. The chicken change will affect the 14,000 eateries in the United States, but don’t expect to see any changes in the 22,000 McDonalds restaurants abroad. At least not yet, anyway. While Chick-fil-A already did away with antibiotics-laced chicken a year ago, the fact that McDonald’s is set to make these changes is rather epic, being the largest fast food chain and all. Once McDonald’s gets its distributors and processors to alter the food (for the better, of course), it will make it substantially easier for smaller chains to follow suit. So, here’s to antibiotic-free chicken! Bon appetit!

About those unemployment benefits….

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Big changes are in store for Target and it’s safe to say some of them won’t be welcomed. The giant retailer, who is in the process of literally closing up shop in Canada, is also in the process of trying to cut $2 billion in costs. Part of that cost-cutting includes job-cutting. Several thousand people will need to polish up their reumes and update their LinkedIn accounts as Target looks to cut most of those positions from its corporate headquarters and some position in India, as well. But Target’s got other big ideas that don’t involve applying for unemployment benefits. It’ll be running a huge Hispanic millennial campaign – apparently the first of its kind – and part of it involves teaming up the CW’s “Jane the Virgin” together with Target’s baby department. Then Target’s also looking to open up 15 more stores, however, eight of them will be CityTarget and TargetExpress stores which – you guessed it – will be taking an urban approach seeing as how they will be geared toward an urban crowd in a presumably urban location.

Let’s make a deal…

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Amazon has come up with yet another way to reinvent shopping – sort of. The e-commerce website added a new feature to its website dubbed the “Make an Offer” button. The ever-resourceful mega e-tailer surveyed a bunch of its sellers and wouldn’t you know it: Several sellers said that the ability to negotiate prices would help drive sales for them – and for Amazon, of course. 150,000 items will get that nifty little button added to their items’ options with hundreds of thousands more coming next year. Unlike eBay, there will be no bidding against others and negotiations are completely private. A customer makes an offer and…voila! The seller gets to reject, counter or reply. If a seller counters, a customer has 72 hours to counter-counter (is that a thing?). Apparently it makes customers feel like they are getting the best possible price for whatever it is they are buying. In any case, if you’re into haggling over prices, you’ll have plenty what to choose from any number of fine art, sports and entertainment collectibles being offered up.

It’s about time…

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American Airlines, which merged with US Airways last December, is reaping huge earnings, along with just about every other US carrier. To celebrate, it’s giving itself a $2 billion upgrade. Which is really great, because last time I flew the airline, on its vintage aircraft sporting drop down televisions with poor picture quality, American Airlines kept showing commercials for its new fleet of aircraft. The commercials made it sound like the improvements were just a few days away. That was over a year ago. In any case, look for redone lounges and better aircraft. Flying international first-class? You’re in luck. Well…you’re paying a mint for that luck, but anyways, you get lie-flat seats (which I’m pretty sure other airlines have been offering for years now). Need to get online while in-flight? No problem. Buy an international ticket to anywhere and American will provide you with satellite-based internet. Or, if you don’t even need to leave the country, you can just fly Virgin America, which has been offering in-flight internet…for years now. If you’re flying on the most economical ticket, which will still be exorbitantly expensive, well then, screw you. You’re lucky just to be sitting in the new airplane. Wondering if that $2 billion will help improve the attitudes of some of American Airlines’ more surly flight attendants? Well, screw you again.

And you’re out!

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Who can the forget the days when Abercrombie & Fitch CEO Michael Jeffries not so charmingly said back in 2006, “We go after the attractive all-American kid with a great attitude and a lot of friends. A lot of people don’t belong, and they can’t belong. Are we exclusionary? Absolutely.” Well now, he doesn’t belong anymore after abruptly “retiring,” something a lot of folks wish he’d done a long time ago, including activist investor Engaged Capital which last year said the company’s lousy numbers (Engaged Capital said it way more eloquently) “is a result of a failure of leadership.” Amen. Investors celebrated news of the “retirement” by sending shares of the stock up over 6%. The company, which has 834 stores in the United States with 166 stores in other parts of the globe, also owns Hollister and Gilly Hicks. Abercrombie & Fitch has been doing poorly for awhile now, unable to compete with the likes of H&M and Forever 21. Abercrombie & Fitch even tried ditching the logo on a bunch of its merchandise, which did little – if anything – to help boost its earnings.

Down and out…

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Delia*s is joining the ranks of the bankruptcy protected now that it has officially filed for Chapter 11. While several of Delia*s teen apparel cohorts, including Abercrombie & Fitch and Urban Outfitters, are merely posting very unfashionable earnings, Delia*s will be getting $20 million just to help liquidate and close down its stores. The retailer, to which bright-eyed teenagers once flocked, can no longer compete with the H&M’s and Forever 21’s of the world. And don’t even get me started on competing with the behemoth that is Amazon. The New York-based chain has 92 stores scattered in malls across the country. With $74 million in assets and over $32 million in debt, its no wonder that Delia*s CEO Tracy Gardner and COO Brian Lex Austin-Gemas resigned. It’s probably safe to say that no one is mourning their departure – well, except maybe for them.

It’s baaaaaaaack…

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Justin Timberlake brought sexy back so its only fair that General Mills is bringing back French Toast Crunch. Yes, my fellow cereal aficionados, the dark days are behind us as the maker of Cheerios, Yoplait and Progresso Soups has finally found the wherewithal to bring us back our French Toast Crunch. The sister cereal to the ubiquitous and oft-loved Cinnamon Toast Crunch has been absent from grocery shelves in the United States for almost a decade – I shutter to think. With the invasion of Greek yogurt and fast-food wars breaking out, the cereal was unceremoniously discontinued as other alternatives shoved their way onto the breakfast scene. But consumer demand brought General Mills to its corporate knees, together with an online petition and a Facebook page dedicated to resurrecting the sweet, breakfast sesnation. Besides, General Mills figures those kids who group in the nineties downing French Toast Crunch are now at that age where they are paying for their own cereal now (at least they should be) and can buy it themselves (at least they should be).

3% down with that?

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There are some very lucky soon-to-be first-time homeowners milling about thanks to Fannie Mae and Freddie Mac. New terms established by the companies are allowing applicants to put up just 3% down payment to get them into a new home. That’s down from 5%, fyi. Fannie Mae is starting to offer that deal December 13. Looking to refinance? How does reducing your equity to 3% sound? If you haven’t owned a home in three years, guess what? You still qualify. Starting in March, Freddie Mac will let lower-income first-time home-buyers hand over a 3% down payment provided they agree to housing counseling. Melvin Watt, head of the Federal Housing Finance Agency and the dude who oversees Freddie Mac and Fannie Mae, wants to spur lending to minorities and young adults because the lenders have made more stringent standards following the crash, and the tens of billion of dollars they had to pay towards lawsuits for underwriting less than ideal loans. Republicans, however, are not digging the idea, finding the whole thing too risky and eerily reminiscent of the policies that led up to that awful crash – from which the country is still not fully recovered.